Which of the Following Is True If Production Displays Increasing

question 227

Multiple Choice

Which of the following is true if production displays increasing marginal returns?

• A) Total product rises by a constant amount throughout.
• B) Each new worker hired adds more to output than previous hires.
• C) The firm must be adding new capital to keep boosting productivity.
• D) Total product reaches a maximum sooner than if production displayed decreasing returns.

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Definitions:

Resource Prices

The costs associated with acquiring the inputs or raw materials needed for production.

Firms

Business entities that produce goods or provide services, aiming to earn profits by meeting consumer needs.

Costs

Costs represent the monetary value of expenditures for inputs, labor, and other resources required to produce goods or services.

Purely Competitive Conditions

describes a market structure with many buyers and sellers, where each firm has no control over the market price and products are homogeneous.